Entergy chief explains merger plans

Cara BaylesStaff Writer

Tuesday

Dec 20, 2011 at 6:54 PM

Entergy is negotiating to turn over its electricity transmission responsibilities to two different groups, which could save customers money, the company’s top chief told a gathering of the South Central Industrial Association on Tuesday.“Turning over operation of assets is a proven concept, and we think it’s the right thing for our customers,” said Bill Mohl, president of Entergy Louisiana.Entergy has applied to join Midwest Independent Transmission System Operator, and, should the deal be approved by government regulators, the transfer of the company’s dispatch operations could go through by December 2013. As a member of that organization, which manages the flow of power across transmission lines and helps companies buy and sell electricity, Entergy could save its customers an estimated $1 billion. Entergy Louisiana has about 99,000 customers in Lafourche and Terrebonne parishes.In a separate, $1.78 billion deal, Entergy will sell its electric-transmission business, which includes 15,700 miles of lines and associated substations to ITC Holdings. The sale would be for larger lines, with power exceeding 69 kilovolts. Entergy would retain its smaller lines, which offer distribution into homes.Mohl said the decision is in part driven by costs. He said federal environmental regulations have become more strict and required retrofitting of the company’s existing energy plants is expensive. That expense, combined with the company’s needed infrastructure improvements and its purchase of several power plants, trickles down to the customer. The agreements could save customers several dollars on their monthly bills and could cushion the effect of future expenses on the consumer, according to Mohl.“We know we are one of those necessary evils in life. Everybody needs power,” he said. “We know you look at your bill and wonder ‘What am I paying them for?’ ”For the crowd at the luncheon, the biggest concern was whether splitting operations would affect service, particularly after a disaster.“Historically, Entergy has been very good after a storm at getting us back up and running,” said Ted Falgout, the former director of Port Fourchon. “Because we have more players in the game, will they be able to go back on line as quickly?”Mohl conceded that any time there is more than one responsible party, coordination can be difficult.“That’s a fair question, and the regulators have asked us the same thing,” said Mohl. “The onus is on us from an integration standpoint.”

Staff Writer Cara Bayles can be reached at 857-2204 or at cara.bayles@houmatoday.com

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